If you do a web search you’ll find that the top result for ODTE is the “Office for Developed and Transitional Economies.” What is that? I have no idea.But it sounds important.
A little further down and you come to one of the best, if not the best, financial recourse sites Investopedia. Their definition doesn’t even use the letters in 0DTE, they call it the End of Day Order, but this is more commonly referred to as the EOD. So this can’t be right.
So you keep on searching until you realize that separating the zero from the DTE helps the search, or substituting the word Zero for the number helps too. Boy this is frustrating. Why is it that so many options traders know what it is, yet you can’t Google the term hardly at all?
0DTE – Zero Days To Expiration
The last day before an options contract expires. Why is that such a big deal? It’s a big deal because after that day the options contract will no longer exist, it will be worthless, it will never see the light of day. Kaput. Fini. Gonezo.
It’s also the day that the options premium decays the fastest, and with every minute, every second it decays even faster, until the contract is completely depleted and the big bell rings, the market closes and the option is dropped in the bit bucket, and someone collected all that premium, and someone else was tripped of it.
Premium starts decaying from the moment an options contract is created. And then it decays in an exponential fashion until that fateful day…0DTE.
For a trader this last and final day provides a unique opportunity to make money, by fashioning trade strategies that take advantage of the unique properties of the zeroth day. In fact this website is all about that day and strategies that help traders grab that premium, cuz premium is money, and money is profit, and profit is good.